A Real Life Example - Pension Consolidation
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This case study is based on a real life situation. We have changed the name of our client as well as the names of the two insurance companies involved, but the situation and the figures involved are accurate. BACKGROUND Michael, 42, started a personal pension many years ago with ABC Equitable early in his career. He stopped paying into this plan when he changed employer 8 years ago and was offered a group arrangement with XYZ Insurance which benefited from an employer contribution. Michael then left this employer and was not paying into either scheme. He came to see us to investigate ways of reducing the charges he pays to the life companies who held his accumulated funds. Michael was also concerned that he would not have enough income at his planned retirement age of 65. He wanted to make better use of his pension funds and take more control over how and where his money is invested, to try and simplify his affairs and gain online access to view his money. THE FIGURES If Michael had left these two pensions ‘paid up’ and made no further contributions, the combined projected value of his retirement benefits would have been £486,380. However, after researching Michael’s two contracts in detail, considering the charges, investment opportunities and retirement options, we recommended that he consolidate his two contracts into one new pension with a more sophisticated investment focussed provider. The new pension plan has even lower ongoing charges which means that the new projected value of his pension funds has increased considerably to £558,329. SUMMARY |